- CRV recovered from its record low with a 43% increase.
- Dealer give up long positions in favor of short positions.
Curve DAO (CRV) is up 43% over the past week due to high trading volumes resulting from increasing buying activity.
Over the past seven days, the CRV price has steadily increased from an all-time low of $0.18 to $0.28 at the time of writing. Despite the remarkable recovery, the token faces further headwinds as the pessimistic sentiment across the market weighs on the price.
Financing rates record sharp decline
Data from Coin jar showed a sharp decline in funding rates into negative territory, suggesting that traders are abandoning long positions in favor of short positions.
The change in sentiment among traders suggests that CRV may have peaked and the price is about to undergo a correction or consolidation.
Source: Coinglass
The sharp drop in funding rates also signals that CRV is cooling down after overheating. The long/short ratio, which is close to 1, also shows that the market favors neither longs nor shorts, resulting in lower volatility.
Source: Coinglass
However, caution remains as open interest has increased from $67 million to $100 million per Coinglass. While this is often seen as bullish during an uptrend, this may not be the case due to negative funding rates for CRV.
The high open interest with negative financing rates indicates an increase in short positions. This signals an increasingly pessimistic mood.
How high can CRV rise?
Loud CoinMarketCap data.
Buyers are likely behind the high volume as the Relative Strength Index (RSI) on the four-hour chart is at 72, indicating that CRV is slightly overbought.
However, the RSI line is trending north, suggesting that buyers have not yet exited the market, creating room for further gains.
The price has also formed an ascending triangle that indicates a bullish continuation if CRV reaches and bounces off the breakout price at $0.285. If the bulls are strong enough, CRV could reach the next target at the 1.618 Fib level ($0.36).
Is your portfolio in the green? Check out the CRV profit calculator
According to analyst Credible cryptocurrency At X, the token still has room for further gains, with the price potentially doubling.
Source: Tradingview
Conversely, the bullish thesis could fail if weak hands that bought at the recent low sell, triggering a decline to the 0.236 Fib level ($0.209).
